Malaysia Completes Repairs to key Sabah Sarawak Gas Pipeline

KUALA LUMPUR (Reuters) - Malaysia's Petronas said production at the Kebabangan gas field in the eastern state of Sabah was expected to return to full capacity by August 2019 following disruption caused by a gas leak at an associated pipeline.

The problem was caused by a leak from the Sabah Sarawak Gas Pipeline in January, the state energy firm said in an emailed statement to Reuters.

Repair works on the pipeline have been completed, and integrity assurance tests being conducted on the 311-mile (500-km) pipeline are expected to be finished by July 2019, it said.

"The supply disruption, however, did not impact our LNG (liquefied natural gas) cargo deliveries to customers," Petronas said.

Last week, Malaysia's finance minister said the country's economic growth was impacted by supply disruption at the Kebabangan gas field. Gas exports have been severely impacted since the second quarter, he said.

Malaysia is the world's third-biggest exporter of LNG, and Petronas is a significant contributor to state coffers.

The country's economy grew at its slowest in two years in the July-September quarter, in part because of "supply shocks" in the LNG sector. Growth in the prior quarter had also been hit by supply disruptions.

Reuters reported in August that Malaysia's exports of LNG fell to a four-year low in July as domestic gas pipeline issues since January took their toll.

Recent trade data showed Malaysia's third-quarter LNG exports totalled 8.7 billion ringgit ($2.1 billion) in value, down about 21 percent from the same period last year.

Reporting by A. Ananthalakshmi; Editing by Nick Macfie and Mark Potter

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